In the last two decades, Georgia has made significant economic and political reforms in the country, which have greatly contributed to the rapid growth and development of the economy and financial industry. For this reason, Georgia has already become a regional financial and investment center. In addition, this dynamic and active finance industry has the ability to attract domestic and international investors. Also, the investors of the finance sectors in Georgia country also have a lot of diversity, which we will get to know further.
Finance Sectors in Georgia
Tbilisi, the capital of Georgia, serves as a major hub for various finance sectors. The finance industry in Georgia has various sectors such as banking, insurance, investment management, capital market, etc. All finance sectors in Tbilisi, Georgia play an important role in the economic growth of this country. These sections are:
The banking sector, which is one of the finance sectors in Georgia, has a significant development. The development of this sector is due to the presence of an increasing number of local and international banks that operate within the borders of Georgia. Georgian banks offer a wide range of services including retail banking, corporate banking, lending facilities to individuals as well as businesses.
Another finance sector in Georgia is the insurance sector. The insurance sector plays a vital role in managing risks related to various aspects such as life accidents or property damage. Currently, 16 insurance companies have been established in Georgia that offer various coverage options to individuals and businesses alike. Besides, the National Bank of Georgia regulates this sector.
Since the existence of this finance industry in Georgia, the desire of people from inside and outside the country to invest in it has increased, the demand for professional investment management services has increased. Because people seek to create or maintain their wealth. For this reason, Georgian asset management companies are increasingly responding to this need by providing innovative solutions in various asset classes. In fact, investment management can be considered one of the fields of finance in Georgia.
Efficient capital markets will strengthen the country’s economic growth through certain activities. These activities include facilitating fundraising activities for companies and providing investment opportunities to individuals. In recent years, the capital markets of Georgia, which is one of the finance sectors in Tbilisi, Georgia, have witnessed positive developments. The reason for these positive developments is the progress to create transparent regulations that will attract more participants to these markets.
Georgian Government Efforts to Expand Finance
Let’s take a look at the efforts of the Georgian government for financial development:
Strengthening Banking Regulations:
Several reforms have been implemented by the government to strengthen the regulatory framework of the banking sector. This entails adopting international accounting standards, implementing risk-based supervision, and establishing a deposit insurance scheme.
Developing Capital Markets:
The Georgian government has taken many initiatives to develop the country’s capital markets. This entails establishing a securities commission, enacting new securities laws, and developing a bond market.
Encouraging Fintech Startups:
Several initiatives have been launched by the Georgian government to promote fintech startups. This includes the creation of a regulatory sandbox, which will allow fintech startups to test their products in a safe environment.
The Georgian government has launched a number of efforts to encourage microfinance. This includes the creation of a microfinance fund to offer funding to MFIs, as well as the creation of a credit bureau.
Benefits of finance investment in Georgia
The advantages of financial investment in Georgia include:
Strong Economic Growth:
Georgia has enjoyed rapid economic growth in recent years, thanks to the expansion of its finance industry. The country’s GDP increased by 4.5% in 2019, and the IMF predicts it will increase by 4.3% in 2021.
Attractive Investment Climate:
Also, Georgia has a favorable investment climate, with a liberal business environment, low taxes, and a simple tax system. The country ranks 7th in the world in the Ease of Doing Business Index.
Favorable Tax Policies:
Besides, Georgia has a flat income tax rate of 20%, which is one of the lowest in Europe. The country also has a simplified tax system and offers several tax incentives for investors.
Georgia is strategically placed at the crossroads of Europe and Asia, making it a vital transit center for trade between the two continents. In addition, the country enjoys access to a number of large markets, including Turkey, Russia, and the European Union.
Georgia has a well-educated and talented workforce, with a literacy rate of 99%. The country also has a big number of engineers, IT experts, and other talented individuals, making it an appealing destination for technology investment.
As a result, with the increase of finance sectors in Georgia, the country’s economy has also experienced significant progress and development. The growing economy in this country makes it easy to do business in Georgia, attract foreign direct investment and even progress in other sectors such as agriculture, production, etc. in Georgia. So, the finance industry will have a significant contribution to the economic development of the country.